Southern California -- this just in

California bullet train funding slashed by House panel

September 8, 2011 | 7:19
pm

The fortunes of California's high-speed rail project, which would connect Southern California to the Bay Area with a 220mph train, took a big financial hit Thursday afternoon, when a congressional panel slashed the Federal Railroad Administration budget.

The Obama administration had asked for $8 billion for fiscal 2012 for high-speed rail projects, including the one in California, as well as other passenger rail programs around the country.

But the House Appropriations subcommittee on Transportation, Housing and Urban Development on Thursday cut the request by nearly $7 billion, leaving money only to operate Amtrak and some smaller programs.

House Republican leaders had signaled before the session that they would not support any request for additional high-speed rail outlays. They cited pressure to cut spending and argued such projects don't make economic sense.

Rep. David Price (D-N.C.) proposed an amendment to fund the high-speed rail program with $1 billion, but it was voted down. The funding bill has to be approved by the entire Appropriations Committee and the full House. The Senate has not yet taken up rail funding.

The California High Speed Rail Authority, the state organization that is building the system, can use about $6.3 billion in prior federal grants and proceeds from an initial bond offering that state taxpayers approved in 2008. But before that step is taken, Gov. Jerry Brown must give his approval to the bond issue and prioritize it for the state treasurer.

The available money is a small fraction of the $43 billion estimated cost for just the first phase of the project--and that figure is substantially lower than some estimates of what the first San Francisco-to-Anaheim section is likely to cost. Without additional federal funding, California could be at risk of running out of money to complete the system. A new official cost projection is supposed to be released next month.

In recent weeks, Brown has signaled that he wants a comprehensive review of the entire project before he agrees to issue the bonds.

At Thursday's hearing, total spending for all federal transportation and housing programs in 2012 was set at $55.2 billion, down $19.8 billion from the president’s request and down $217 million from the level last year. The spending was mainly affected by the deficit reduction agreement that averted a federal default before Congress adjourned this summer. The committee hearing concluded just before the president presented a joint session of Congress with his plan to stimulate the U.S. economy.